Economic Paper

2310-1385 (online)
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This series examines current economic issues from a Commonwealth perspective. The titles in the series are technical papers of topical interest to specialists concerned with trade, micro and macroeconomics, development economics and related subjects.

Trading on Commonwealth Ties

Trading on Commonwealth Ties

A Review of the Structure of Commonwealth Trade and the Scope for Developing Linkages and Trade in the Commonwealth You do not have access to this content

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Chris Milner
01 Feb 2008
9781848599000 (PDF)

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What are the characteristics of current intraCommonwealth trade, and how can it be encouraged to grow?

Trading on Commonwealth Ties identifies opportunities for stimulating trade within the Commonwealth, but warns against setting up a free trade agreement across the member states. Chris Milner argues that while the idea of trying to build a Commonwealth free trade agreement may hold enormous appeal, it is fraught with legal, administrative and political difficulties. He identifies improving trade infrastructure – particularly roads, railways and port facilities – as a key means of lowering trading costs and boosting trade both within the Commonwealth and with nonCommonwealth countries.

IntraCommonwealth trade currently generates about US$225 billion a year in export trade for member countries, which is equivalent to about 16 per cent of Commonwealth countries’ total exports. This is a substantial volume of trading activity, but overall the bulk of Commonwealth countries’ trade is with countries outside the Commonwealth. Nonetheless, for some countries, like Botswana, Namibia, Papua New Guinea and Samoa, intraCommonwealth trade remains significant as it represents in excess of 70 per cent of their international trade.

This book will be of interest to economic planners, researchers and policymakers in all Commonwealth countries.
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  • Summary

    The Commonwealth is well-placed to provide support through the collaborative actions of its members to further its members’ goals of trade expansion and welfare enhancement.

  • Introduction

    With one quarter of the world's governments, one third of the world's population and one fifth of global trade, the Commonwealth is a diverse community of nations sharing an inheritance of a common language, institutions and culture. It brings together a unique range of countries, comprising rich and poor, large and small, as well as island, landlocked and coastal states. The association boasts the ‘Commonwealth culture’ of amicable partnership, in which activities are conducted in an atmosphere of co-operation and with a shared sense of community, reflecting its members' common traditions and shared values; this culture has inspired a high level of engagement among Commonwealth members.

  • Analysis of Intra-Commonwealth Trade Flows

    Before exploring how trade policies and other policy and non-policy factors affect trade patterns within the Commonwealth, it is helpful to summarise current patterns of trade. This study seeks to do this by investigating the volumes, direction and composition of intra-Commonwealth trade and to compare these patterns with Commonwealth countries' trade with non-Commonwealth countries.

  • Trade Policy Relations within the Commonwealth

    Trade policy relations within the Commonwealth are fashioned by the multinational, regional and bilateral commitments made by Commonwealth countries. In some areas these commitments are complex and involve varying numbers of Commonwealth and non-Commonwealth countries. In addition, they are not static arrangements: further commitments may have been made but not necessarily fully implemented, and further possible commitments may be currently under negotiation.

  • Barriers to Intra-Commonwealth Trade

    It is relatively straightforward to identify the types of barriers to trade, and to quantify these barriers to greater or lesser degrees of precision. In broad terms, these barriers may be organised into groups according to their location (for example whether they exist in the exporting or importing country or in the transit area or space between one and the other country) or according to their nature or source (i.e. whether they are caused by policy interventions or other features of the physical or institutional environment in which international exchange takes place). However, in a world in which these different barriers may exist simultaneously, it may well be more difficult to identify which barriers are the more binding constraints on exporting and importing.

  • Trade Potential among Commonwealth Members

    Earlier chapters have outlined the extent and direction of existing intra-Commonwealth trade (chapter 2) and the nature of the barriers it encounters (chapter 4). The aim of this chapter is to explore how those barriers and trade policies affect the extent and direction of existing trade. This requires the modelling of the determinants of intra-Commonwealth trade, so that the divergences between actual trade flows and potential flows (i.e. as predicted by the model) can be explored.

  • Policy Options and Recommendations for Promoting Intra-Commonwealth Trade

    The promotion of intra-Commonwealth trade, like the promotion of trade more generally, can be sought through the lowering of policy and non-policy barriers to trade, as reviewed in chapter 4 of this report. The trade-promoting approach can therefore either be comprehensive or selective, that is in terms of barriers or country coverage. This chapter will seek to describe the types of comprehensive and selective options that might be considered by the Commonwealth, and to set out the arguments for and against each particular option.

  • Summary Conclusions

    This study has five broad objectives (see section 1.2). The analyses of current intra-Commonwealth trade flows (objective 1 of the study) and trade potential (objective 2) are reported on in chapters 2 and 5.

  • References and Appendices
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